Intense work is going on towards a new edition of the ISDA standard definitions for OTC equity derivatives. Sapient's Nick Fry and Ed Osbaldestin urge the market to do better than the last time.
The next few months will be crucial for the over the counter
equity derivatives market. Participants have a once-a-decade
chance to clean up and simplify the market’s
operating practices, in a way that could make trading more
robust and efficient.
At issue is the documentation of trades, and the opportunity
to achieve a degree of standardisation that the market has
never enjoyed before.
This is not just an optional upside for the market, however.
It is a requirement.
For several years regulators, led by the Federal Reserve
Bank of New York, have been pushing the industry to become more
standardised and automated.
Leading dealers signed a letter to the Fed, published on
June 2, 2009, committing themselves to certain targets. Now
they have got to deliver.
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